Costa Rica's Environmental Services Law
Lic. Roberto Solano Leiva
The compensation for environmental services program is the only existing Clean Development Mechanism in the world. The Costa Rican government pays those persons that use their properties for conservation and reforestation of trees that adapt well to the area. In other words, its purpose is to recompense ecological and forestry uses of land, including reforesting species for commercial reasons.
The concept of Clean Development Mechanism was created in the United Nations Summit on Environment and Development, held at Rio de Janeiro in 1992, specifically on the Climate Change Convention. In said occasion, different countries all over the world agreed upon the creation of sustainable development programs that would reduce the greenhouse- effect gas emissions with properly certified ecological actions. In addition, the developed nations, which are by far the biggest pollutants, promised to pay developing countries for their environmental services to the world's atmosphere, better know as the green or ecological debt.
At a national level, Forestry Law number 7575, official since April 1995, defines environmental services as the benefits that natural forests and forestry plantations provide for the improvement and protection of the environment, or physical- biological context; benefits like the reduction of greenhouse-effect gas emissions (absorption and fixation of carbon), protection of natural resources (urban, rural and hydroelectric), protection of biodiversity, development of scientific and eco-tourism investigations, and the protection of ecosystems and natural scenic beauty.
The Ministry of Environment and Energy (MINAE), through the National System of Conservation Areas (SINAC) and the National Fund for Forestry Financing (FONAFIFO), which together compose the National Forestry Administration (AFE), is the governmental authority in charge of assigning incentives like the Forest Conservation Certificate (CCB) and the Forestry Payment Certificate (CAF). These certificates encourage conservation and reforestation by making these efforts on private property a more profitable or economically viable activity. The incentives consist on the payment of a sum per hectare, territorial tax exemption, asset tax exemption, and immediate police protection in case of any unwanted intruder, squatter or invaders.
To enter the program, the interested owner must fill the application provided by the regional FONAFIFO office, and submit several legal and technical documents to justify the suitability to receive one of the certificates mentioned before. The AFE will then select the appropriate owners that can sign a contract with the government. These owners will temporarily promise not to change the use of their land for other purposes than conservation or reforestation, while assigning their certified rights to FONAFIFO, so it can bargain these rights in the international market as green bonds, or in any other way. The government promises to provide the incentives, technical assistance, and reinforced police protection for the property. The contract must be recorded in the Real Property Section of the National Registry, but the annotation in the registered title does not encumber the right to transfer title to a third party or to obtain financing from any bank in Costa Rica.
Recently, the World Conservation Union (IUCN) gave recognition to Costa Rica for its ten year with the program. In addition, the IUCN and the World Bank created the Sustainable Biodiversity Fund to consolidate this conservation effort. Fortunately, other countries of the region have expressed their interest on this type of mechanism to encourage conservation. Actually, the atmosphere, the water supplies, and biodiversity are the natural resources that gain with this program. Nonetheless, we must keep advancing and start protecting the soil, which is victim of uncontrolled erosion in this rainy country.
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